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I keep reading the big challenge Democrats face in the 2018/2020 elections is that they have moved too far left, proposing a platform that includes “free” universal health care, “free” college tuition, “free” pre-school day-care—and a national infrastructure building and repair program paid for, notby the states, but by the federal government (i.e., “free infrastructure”). Progressives seem to genuinely wonder why mainstream Americans would object to these proposals. Why would American voters be put off by proposals they’d obviously gain so much real—and in many cases personal—benefit from?

The answer lies in three objections which flow together to become an undercurrent mantra of the American psyche:

When the government pays somebody to provide a service, it is the government who gets to decide who that provider is, and the quality of the service provided. Americans, in general, do not like that idea: they call it “socialism.” Americans prefer the idea that the individual citizen pays for his or her own services and, therefore, gets to choose who provides those services—presumably based on the value and convenience the provider offers.

To pay somebody to provide a service, the government must collect taxes. The more services the government decides to provide, the more taxes it must collect. Alternatively, the government can borrowdollars to pay for the services it provides—but ultimately it will have to collect more taxes, again, to repay what it has borrowed. Americans do not like to pay taxes—and they do not like the idea of their government being “in debt.”

Many of the services progressives want the government to provide can, in fact, be provided at lower costs—and with better results—if they are structured with the same profit-motive that organizes and incentivizes the Market Economy. The need to constrain the federal government’s taxing and borrowing means, logically, that “costs” for government-provided services must be reduced—and it is a demonstrated fact that costs are reduced by the creative competition of a Market Economy seeking to maximize profits. It is also a demonstrated fact that where the government provides services “for free” (“socialism”) there is no incentive or dynamic for controlling costs, maximizing efficiency, or creating value. The “socialist” model encourages reliance on the government, unmotivated idleness on the part of citizens, one-size-fits-all products and services, and a massive bureaucratic state that is unresponsive to customer needs and obstructive to creative innovation. A profit-motivated structure, in contrast, encourages self-reliance, freedom-of-choice, creative entrepreneurship, and merit-based rewards that keep people busy and constructively motivated.

These are not idle objections. Progressive Democrats ignore or brush them aside at their peril. I would go further and say the only viable hope for the progressive agenda is not just to consider these objections, but to embracethem—to specifically frame progressive goals in terms of both the fears and aspirations the objections express. In other words, the Democrats must begin speaking not only to the needsof mainstream America, but to its underlying psyche as well.

Here are a few ideas for reframing the message:

Paying Americans to CARE for Americans: How our fiat-money system works.

Health-care is never “free.” It “costs” real time and effort on the part of doctors, nurses, technicians and administrators to keep Americans healthy. The “government” is not going to provide these services—American health professionals are going to provide them. Paying these care-givers to give the time and effort to heal and nurture disabled, sick and injured Americans is one of the primary purposesof our modern fiat-money system. This monetary system—which has been willfully misunderstood, but operational now for over half a century—pays Americans first, then collects taxes second.

Paying Americans to TEACH Americans: How our fiat-money system works.

Education is never “free.” It “costs” real time and effort on the part of teachers, administrators, (and students). The “government” is not going to provide these services—American education professionals are going to provide them. Paying Americans to spend the time and make that effort to educate and train our future workers, managers, and creative entrepreneurs is one of the primary purposesof our modern fiat-money system. This monetary system—which has been willfully misunderstood, but operational now for over half a century—pays Americans first, then collects taxes second.

Paying Americans to CARE for CHILDREN: How our fiat-money system works.

Pre-school day-care is never “free.” It “costs” real time and effort on the part of early-childhood care-givers and teachers. The “government” is not going to provide these services—American child-care professionals are going to provide them. Paying Americans to spend the time and make the effort to ensure that working parents have a safe and nurturing place for their children is one of the primary purposesof our modern fiat-money system. This monetary system—which has been willfully misunderstood, but operational now for over half a century—pays Americans first, then collects taxes second.

Paying American business to REBUILD AMERICA: How our fiat-money system works.

We know we mustrepair, rebuild, and modernize America’s infrastructure. There is no choice. The “government” is not going to get this done—American design and construction professionals are going to accomplish it. Paying America’s engineers, architects, fabricators and builders to repair and modernize our bridges, roadways, damns, water and sewer systems, airports and seaports, rail and urban-transit systems—paying Americans to spend the time and apply their skills and creativity to rebuild and re-envision all these systems is one of the primary purposesof our modern fiat-money system. This monetary system—which has been willfully misunderstood, but operational now for over half a century—pays Americans first, then collects taxes second.

When we use our sovereign fiat-money system to pay Americans to provide health-care, education, and child-care services to American families, those families choosewho provides them the service. They choose their doctor. They choose their college or technical school. They choose their child-care center. The providers of these services must compete for the “business” of American families.

When we use our sovereign fiat-money system to pay American engineers, architects, and builders to design and construct our modernized infrastructure, it is regional, state, and local communities who decide what should be built—and what should not be built. We have a traditional democratic process that can make those decisions: The Referendum. An “infrastructure referendum” is not a referendum on whether we should tax ourselves to accomplish a needed or desired collective goal—it is a referendum on whether a particular goal is something we want to pay ourselves—as a democratic society—to accomplish.

Because our modern fiat-money system pays us to accomplish collective goals first, then collects taxes afterwards, we can re-evaluate how much taxing the federal government needs to do to drain excess dollars from the economy (to manage inflation). This might well result in reducingthe taxes Americans have to pay.

What is at play here is not just framing the progressive agenda in terms of the reality of modern fiat-money—but framing modern fiat-money in terms of the values and traditions embedded in the American psyche. This is the REAL challenge the progressive platform faces.

43 comments

The pushback against universal health care, college tuition, pre-school day-care and a national infrastructure building & repair program – this all seems to stem from American attitudes with a large fear of socialism rather than a strict examination of the facts. Maybe what the argument should be is that all these programs would be affordable to average Americans if the money could come from elsewhere. But make the arguments emotional, not intellectual. Don’t get it bogged down into how the financial system works with talk of fiat dollars. That is a losing game I believe. I have a suggestion or two here.
Without even researching it, I am willing to bet that the US government probably gives some of the biggest corporations and banks hundreds of billions in what amounts to give-aways, tax rebates, free research, etc. Put the boot in here. Say to ordinary Americans why should they go without so that billionaires get stuff for free. Tell them that this amounts to socialism for the rich. Make it about fairness. Psychologically, that would be very effective.
Then put the other boot in. Point out that last a year a report stated that 18 of America’s biggest corporations paid zero federal income tax from 2008 to 2015. Tell them what US corporations paid post-WW2 and how that paid for things like the highway system, free college and everything else that the post-WW2 generation enjoyed. Then tell them how little modern corporations pay now and suggest that is why there is so little money for these programs. Get the inner Puritan all fired up here. Tell them that big business is cheating ordinary Americans and are not pulling their weight.
Does this all sound unfair? Good! Because that is how you will have to do things to get changes done. Make the other side get bogged in discussions of how the economy works. Call out those that vote against average Americans interest and target them with each and every election. Vote in progressives and hold their feet to the fire. That I believe is the way to go.

You are absolutely right. That strategy turns the tables on the freeloaders by using their own, very successful, arguments against them. Welfare for the rich. Getting something for nothing. Driving a steak through the heart of excessive individualism. These are personal and emotional appeals, not lectures from an ivory tower intellectual.

What is needed is calling the cheating, lying BS out, and having the personal and political fortitude to remain true to purpose. That takes a lot of effort, and the elite leverage that fact at every turn. It is easier to deflect that emotional anger against easier targets- so change is very slow to progress and easily compromised. By definition, that is what the democrat party is about- defusing emotional anger.

The argument about using the power of a Sovereign Currency is meaningless if you are not the sovereign or have political power in the first place. Its putting the cart before the horse, and most people instinctively get that fact. Powerful people are in a position to give gifts and gift-giving is what reinforces their political power.

Political and social power is defined by the ability to give gifts- to give things away for FREE.

But everyone knows that nothing is actually FREE, there is a social contract that underlies all gift-giving. To uphold the contract enables the gift-giving to continue. Break the contract and you are thrown out.

Money is the convenient tool, in some circumstances, to ensure social action without the need for upholding a complicated social contract that underlies gifts. Mercenaries are a convenience, but their drawback is that they cannot ensure political power. They go away when the money runs out. So real political power lies in maintaining a gift-giving relationship with your subjects or compatriots, solidified by a underlying social contract. A wholly Market Economy seems an unstable social development because the underlying social contract is money based instead of deeper social principles. Money becomes the primary social force instead of a secondary one.

George Carlin put it best when he said, “Its a big club, and YOU ain’t in it!”

The political landscape is littered with these separate “Clubs”, that form and then dissolve- only to reform in different guise. Physical control of actual resources is the glue that holds clubs together. They are the raw material for gift-giving.

What resources does the Left have control over? What can they give away for FREE? Getting into discussions about paying for things plays right into the hands of the elite. Pooling resources in order to form strong associations seems more important and fundamental.

Poll after poll have shown at least a dozen of the major progressive goals have 70% or more support from the general public, including every one mentioned by the author. So with respect to messaging I would argue that the “public” is on board, and that the messaging needed is one that explains that in our democracy only the other 30% of the country gets to make the decisions.

America is not a functioning democracy. Our policies and laws no longer reflect the will of our population, but the desires of a wealthy elite. Those on the Right have argued for decades that “government is the problem”, that government is “taking your money”, and that our social safety net should not “be a hammock.” The constant in all the messaging is that our government collects taxes (confiscates money), and spends it on unworthy and inefficient pursuits. But those on the Right should be judged not by what the claim or say, but by what they actually have done and will continue to do, and that is use our government to “take your money” and direct as much of it as they can to the rich men that fund the Republican Party and its candidates. This financial feedback loop has been the means used to corrupt our democracy, bigly, to where our elected representatives are now handed the legislation by their donor’s groups to vote “yes” on, often without even reading it.

The capacity for our democracy to serve our people, to promote the general welfare, is great, on paper. But that is not how it works.

The majority of the country sees this, and gets it. Academic studies have documented it. As my Senator Mitch McConnell long ago so famously said, in arguing against restrictions on campaign donations and spending, “money is speech”. Well, he won that argument, and in today’s America the voices, the “speech” of the majority of the people, are simply not being heard.

“Democracy is two wolves and a sheep voting about what is for dinner.”

Whenever I hear someone bemoaning something as “anti-democratic” or “not in keeping with our democratic values”, I remember that our democracy has evolved to produce the system we have now.

“Democracy” is cheap to posit as a solution to many societal problems, as people are urged to vote with very limited options to choose from (as in the last Presidential election).

I prefer the model that the late Alex Carey suggested, that the wealthy/elite strive to “Take the risk out of democracy” to keep the masses FROM actually getting economic benefit from their democracies.

While Mr. Alt’s point is well taken, I must differ with his conclusion. “ … the REAL challenge the progressive platform faces” is not in framing the fiat money system.

The REAL challenge (real in the most literal sense) is convincing the average American you’re not some libtard using fancy French sounding language to confuse them on some issue that is really just common sense if you hadn’t been made so stupid by all your education.

The issue is not that the Democratic Establishment has moved too far to the left. It is that it has been completely captured by the rich and is using identity politics in a desperate bid to hide it, but it is beginning to become so big that they cannot hide it anymore.

Economically the Democratic Party is a very right wing party by Western standards. It is ideologically committed to neoliberalism because it is paid to do so by the rich, despite the massive amount of failures caused by neoliberalism.

So true! My thoughts are that the people will take anything that’s free, whether it’s health care, infrastructure or education. It’s hard to enact social programs when the two parties have been taken over by neo-liberals who feed at the same trough and vote again the people’s interest. We need to change this first.

Anyone remember when during the tea party debate on CNN in 2012, audience members cheered the idea of letting an uninsured man die instead of providing him healthcare? Or as Hillary would say, “no pony for you!” My point is, US society breeds callousness and cruelty. Now, can it be changed? Possibly at the municipal or state level. Can you imagine a state that provided healthcare, education and a living wage for all its citizens?

States can’t provide fiat currency/ debt/ payments. Just look at local real estate tax increases over the last few years… stagnant wages as jobs become scarce, population grows. Hidden inflation/ erosion. And, how many municipalities and counties are on the ropes.

Couple that with the tsunami of the boomer’s retirement and expectations… we need to collectively — yes collectively– grow up and go forward.

Philosophically, it looks like an uphill challenge when we have been willing to institutionalize death/ destruction/ disruption of real peoples lives all over the world as our primary national objective for four five generations (think foreign oil) .

Maybe pay Americans to upkeep the existing military equipment we need to defend ourselves, and decommission the rest, turning swords into ploughshares, and then start shrinking that outlay?

Note that the hypothetical 30 year old man chose not to have insurance. As Mr. Paul said, “That’s what freedom is all about, taking your own risk.” That applies to the CEOs, Wall Street, the credentialed class, the home flippers, and the 30 year old man who doesn’t buy insurance.

Even if the hypothetical man had insurance, he may not have gotten the healthcare he needed.

Please allow me to pick on this tidbit in the article:
“…Many of the services progressives want the government to provide can, in fact, be provided at lower costs—and with better results—if they are structured with the same profit-motive that organizes and incentivizes the Market Economy…”

I happen to live in France, which spends less than half of the USA on healthcare. The system is excellent, renowned in the world, everybody has access and nobody is bankrupted by medical bills. Same in the Netherlands where I was born.

The author lauds the Market Economy, capitalized. I might agree with him on that point, but the USA has long drifted away from a genuine Free Market. The healthcare system in the USA is a tragic example of the system gone awry, morphed into a racket of for-profit hospitals, big pharma and above-the-law insurance companies, all colluding to screw the hapless patient out of his last dollars.

Instead of blathering about “free stuff” that is never going to happen, Democrats might want to do something about THESE very real problems. But since they are largely sitting on the same gravy train, I would not hold my breath.

Progressives will fail if they continue to push for education, housing, healthcare, and infrastructure within the current industry frameworks without changing the structure of these industries themselves. These sectors have been broadly agreed as socially beneficial so have received financial support from the federal government without a commensurate level of industry structural design by the government.

That has allowed these sectors to become money-production machines for their respective industries, resulting in very poor bang for the buck for the supposed beneficiaries. Student Loans, Government-backed mortgage agencies, the whole medical billing and insurance maze, and inefficient, slow, and expensive infrastructure contracting have led to a growing belief that the whole system is just not working and cannot be solved with deficit spending, some more tax breaks or government grants.

Durable and sustainable progressive success that will last beyond an election cycle will happen only when progressives can demonstrate alternative working models at a micro level that can scale up and displace the current mess.

You might be able to channel more money to these sectors. But without industry-level reform, all that extra money will result in relatively little benefit to the citizens, enrich the respective parasitic oligopolies, and strengthen the populist, reactionary, “burn it down” backlash.

This started with Perot in 1992, continued with Trump in 2016, and will get worse before it gets better as the progressives are fighting the wrong battle.

With all the money that sloshed out of Paulson’s three page scribbles on his legal tablet, fractional reserve banking, and the clever lawyers and financial wizards on Wall Street and elsewhere, bankruptcy will simply allow even more wealth aggregation in the few hands that have so much and want MOAR.

I’m not saying no more bailouts, but to imagine that the vultures won’t delight in pennies on the dollar spoils is naïve. It will generate lots of activity, but only in the small FIRE circles.

JD Alt, thank you for an excellent piece, the main point of which still seems to elude many NC readers, rather to my surprise. I hope this particular piece will find fertile ground in D.S.A. circles, as it appears many “progressive Democrats” are just too brainwashed by what they “know to be true that just ain’t so” (paraphrasing Mark Twain). I know someone who’s quite active in D.S.A. so I’ll try to plant the seed in his garden.

It would be better stated: “Spend for the people, then tax activities and behaviors we want to restrict or discourage.” That’s how it actually works. We’re just spending on the wrong people & things, then taxing the wrong the people and things. Works just dandy for the elite, but not for the 99%.

There is a third option, left unmentioned in point 2: just create the money. Both MMT and cryptocurrencies are useful demonstrations that money is created out of nothing. Later, Alt starts using the term “sovereign fiat-money system.” What is so sovereign about it? The Federal Reserve system is privately owned by — and basically controlled by, and for — big financial firms. The very presence of these private powers renders the idea of national sovereignty a farce.

Point 3 is utter bullshit. How many more reviews of the various disasters of privatization need be published before people like Alt realize they are just plain wrong? I think Alt is completely ignoring the anger and disgust a very large number of Americans now harbor towards large corporations. Just look at how hated the cable TV companies are, and the joke that is called “customer service” you have to deal with when there is a billing error.

In fact, as was reported a week or two ago, a clear majority of millenials are now hoping to to see the end of capitalism.

As Mel pointed out, Mr. Alt cited the three propositions as examples of typical conservative objections to progressive ideas. He then discusses ways to argue against them. He is not agreeing with them.

Problem with Progrssives is there are no managers. Even Bernie won’t accept MMT publicly. There is absolutely No Capt Picard to say “ Make it so” or a Nahshon to enter the waters of the Sea of Reedshttps://en.m.wikipedia.org/wiki/Nahshon

“Many of the services progressives want the government to provide can, in fact, be provided at lower costs—and with better results—if they are structured with the same profit-motive that organizes and incentivizes the Market Economy.”

What is the evidence for this? The author provides none. Both the British NHS and the railway system show that the reverse is true. Attempts to ‘privatize’ elements of the NHS by introducing a health care ‘market’ have wasted time and money, incentivized bureaucrats, and deteriorated services. Since the privatization of the rail system, taxpayers now pay more to maintain the system (and ensure that private ‘marketeers’ make a profit) than they did when it was state run.

Americans already enjoy socialism in the form of social security, Medicare, and the VA and other benefits for the military. As KYRocky observes, a large majority of Americans support single-payer health care. What prevents this from happening? The Democratic and Republican “Free Marketeers.’

Alt recommends embracing the issues. Here is a variation on that theme.

Consider that there has been marketing genius behind all the efforts to enact and support the programs he mentions. Acknowledging and understanding the extent of that marketing genius, however potentially diabolical or malevolent, requires setting aside your initial revulsion to the concept and fact. The set-aside step is where so many get bogged down and waste emotional and other efforts spinning wheels that could go toward solutions.

Once you can see how that process works for each of the programs, and then drill into who the players are (always follow the money), you can start to be on the road to a more comprehensive view of the issues.

First understand, then be understood, part of one’s mental infrastructure ;)

To those who argue that J.D. Alt’s “solutions” are misguided, my personal experience validates that view 100 percent. My Republican brother, who’s very smart, articulate, and enterprising, repeats Alt’s three objections almost word for word. Normally close, we haven’t spoken for more than three weeks following an after-dinner shouting match at his home – ironically, triggered by mention of NC and an attempt to explain MMT (as much as I understand of it). Here is a close approximation of the conversation:

Bro: The pitchforks are coming out pretty soon.

Me: You’re right, and you’d be surprised by who else agrees with you. You really would like Naked Capitalism. [I’d mentioned it to him several times in the past two years.]

Bro: Yeah, well I’m worried about the direction this country is going [he was referring to the new tax bill and the federal deficit). Mostly for my sons. They’re working hard to get ahead, but taxes take such a big chunk out of their paychecks that they come home with almost nothing.

Me: Well, then, I’ve got something for you. Your taxes don’t fund the government. The government can just print more money – well, they don’t print it, it’s created electronically. How do you think the Pentagon keeps getting all the trillions it wants?

Me: Not smarter. Most people haven’t heard of it. I just happen to have read about it – one of the reasons I like Naked Capitalism so much [WRONG THING TO SAY AT THIS POINT] –

Bro: You spend too much time on the Internet.

Me: Because the media can’t be trusted anymore, and I need to know what’s going on –

Bro: It’s all rumor. Just a bunch of rumors.

Me: Look, this isn’t a bunch of nutcases. This is coming from economics professors at major universities, and more than one. One of them was the economic advisor to Bernie Sanders [SECOND WRONG THING TO SAY!]

Bro, muttering under his breath: Bernie …

Me: Seriously. This could change everything –

Bro, irritated: OK, then I’ll just stop paying my taxes!

Me: That’s not how it works. The law has to be changed. Congress makes the laws, so we have to try to convince –

Bro, now angry: I don’t have to be convinced of anything!

Me, frustrated: I’m not trying to convince you of anything. You’re not the one who makes the laws. Those are the people who need to be convinced, and so we need to talk about it –

Bro, virtually screaming at me: I don’t want to talk about it! I am not interested! Not interested! I HAVE ZERO INTEREST, OK? I-AM-NOT-INTERESTED!

At which point, I stood up, got my coat, and walked out – regrettably forgetting to thank my sister-in-law for the delicious homemade pasta. Brother is screaming after me, “I don’t have all day to spend on the Internet. I get up at 5:30 so I can feed my family, and I work all day … “

The back and forth with your brother symbolizes the profound effect that cultural values and traditions have on our political thinking. As Alt states in his essay:

“What is at play here is not just framing the progressive agenda in terms of the reality of modern fiat money but framing modern fiat money in terms of the values and traditions embedded in the American psyche.”

If it was only a question of satisfying material wants MMT might have a relatively easy road to acceptance but unfortunately both the Market and the State tend to somehow become enemies of culture and tradition, in the sense that both seem to end up promoting passive and dependent citizens instead of active shapers of their own democratic institutions.

Far as I understand it inflation as a fear when talking of healthcare, education, or infrastructure building that there will have to be a shortage of labor.
That shortage is not apparent. It can be useful for privatization parties to exaggerate labor shortages somewhere. I am suspicious of some of the numbers produced by those with interests in full on privatization.
It would be great if public hospitals were reinvigorated. The public healthcare systems that exist need to be protected.
The flaws in the general understanding of the elastic nature of the US Treasury are so profound as to produce dystopian lives for the majority.
What great fears of Socialism exist, exist in those who are siphoning off public funds at every opportunity. They don’t at all like the idea that these working for government initiatives might pay a living wage.
People of the US really do want the FDR Post War New Deal, and those with control of the media are often judged to not at all want that. They didn’t when Norman Mailer wrote The Naked and the Dead. And despite the eloquent warnings of FDR, those with more private power leading their perversions of corporations want more than ever, since the near gone reign of Ryan.
A feudalist tax system has been put in place. Still celebrating are they in anticipation of more.
A schooling of the American Public using sentences such as: “The Federal Government Spends first & taxes second.”
“You are denied a stable, well skilled, prosperous life, because some in power simply want to take it from you.”
“You are to be convinced that Privatization is good for you as you suffer its ends that are dystopian.”
What was it Pangloss had to say?
Thanks.
P.S. Looks like class warfare to me. In the state I live it is obvious that if one is poor it is because some pseudo aristocrats want you to be poor. Below the Mason Dixon there is a lack of respect for the Federal Government. As shared by the indoctrinated lumpen proletariat they participate in their own enslavement.

Is that how it’s working for the overbloated military and security/surveillance state?

However , they find the money for that, that’s the same way they find the money for education, healthcare, etc. While it’s getting done, they can figure out and debate alternative ways of doing it.
How’s that frame?